Modelling the Performance of Irish Credit Unions, 2002-2010
Financial Accountability and Management, Forthcoming
34 Pages Posted: 6 Jun 2012 Last revised: 24 May 2013
Date Written: November 5, 2012
This study undertakes a modeling based performance assessment of all Irish credit unions between 2002 and 2010, a particularly turbulent period in their history. The analysis explicitly addresses the current challenges faced by credit unions in that the modeling approach used rewards credit unions for reducing undesirable outputs (impaired loans and investments) as well as for increasing desirable outputs (loans, earning assets and members’ funds) and decreasing inputs (labour expenditure, capital expenditure and fund expenses). The main findings are: credit unions are subject to increasing returns to scale; technical regression occurred in the years after 2007; there is significant scope for an improvement in efficiency through expansion of desirable outputs and contraction of undesirable outputs and inputs; and that larger credit unions, that are better capitalised and pay a higher dividend to members are more efficient than their smaller, less capitalised, and lower dividend paying counterparts.
Keywords: Credit unions, Efficiency, impaired loans and investments
JEL Classification: G21
Suggested Citation: Suggested Citation